Buying Property in Spain - Five Points to Consider

If you are looking for information on buying property in Spain, I
think you will find this article useful. Settle down to read and take
notes because you should know the following facts before you begin to
consider viewing properties in Spain.

In this article, we're going to look at the different types of
properties available, the additional costs you must consider on top of
the property selling price and how you should go about viewing the
properties you are interested in.

We will then take a look at how to find the perfect lawyer to help
you with the transaction, and how to get a mortgage. After reading this
article you will know the basic steps you should take to ensure buying
your dream home in the sun is a pleasurable and trouble-free experience.

Which Type of Property?

The usual types of properties you will come across while browsing
websites or estate agent window displays, are townhouses, villas,
apartments or 'fincas rusticas'.

A townhouse is usually a two or three storey detached building on its
own small plot. Many of these will be on purpose built urbanisations,
or could be stand alone buildings. They are usually situated in
convenient locations not far from the town centre and local services.

Apartments are likely to be in larger blocks, they will often have
communal gardens and a swimming pool. An annual community charge will be
asked of each apartment owner for upkeep of the building and gardens.
You should make sure you know the community charge before purchasing,
and be sure all previous community bills are paid, because a new owner
will unfairly inherit any unpaid bills from the previous owner.

You should also be aware that the 'Presidente' of the building and a
few other residents will decide when the building is to be painted, when
balcony fittings are to be uniformly changed etc. When an improvement
for the building is decided upon, you will be obliged to pay whether you
agree with the proposals or not.

Villas are usually detached houses, or occasionally semi-detached. A
villa will have its own garden, and very possibly a pool.

Villas are also generally built on purpose built urbanisations, and
it is not unusual to find shared facilities such as a pool, tennis
courts, and recreational areas for children.

If you buy a villa, you will probably find you are on the outskirts
of the town centre.

A finca rustica is typically a farmhouse type building located in a
rural location. The finca is likely to have plenty of adjoining land,
which can be used for growing produce or similar.

If you are interested in a finca, one thing you will need to check is
the water and electric installations as many of these rural properties
are off the grid for electricity. Mains gas is almost certainly out of
the question, and often water will be provided by a well. This type of
living is obviously not for everyone, while others thrive under these
more natural conditions.

When choosing your property type, you should also take note of the
proximity of your neighbours. If you move into an apartment block
occupied mainly by the Spanish locals, be aware they do not give much
attention to the noise levels and generally in most towns, between 9am
and 12pm any level of noise is acceptable, and complaints you might make
will be ignored.

If you like a quieter life, in Spain you should consider a property
that does not have close neighbours.

It is of course also important to find out well in advance how often
the public transport runs, especially if you will be relying on it to
get children to school or to get to a place of work.

Additional Costs

Obviously, you will be paying the selling price of the property, and
you should also budget for another 10% of that price to cover the buying
costs.

It is customary for the buyer to cover all fees other than the estate
agent fees, if applicable, and the 'plus valia' which are the
responsibility of the seller.

Property Viewing

Once you have decided the type of property you would like to
purchase, the area you would like to live in, and how much you wish to
spend it is time to begin viewing some properties.

If you live outside of Spain, you will need to spend a lot of time
looking at properties online.

You can find properties on estate agent websites, or through private
ads which are often placed on English speaking news sites with a
classified section.

Be aware that in Spain, anyone can set themselves up as an estate
agent without qualifications and there are no rules they have to adhere
to, so use your instinct when dealing with agents, and if possible deal
with an agent that is a certified member of the Agente de la Propiedad
Inmobiliaria (API), or the Gestor Intermediario de Promociones y
Edificaciones (GIPE).

These are professional associations that require their members to
adhere to certain standards and sit examinations.

Once you have a shortlist of properties, it is recommended you rent a
similar property in the area for as long as your schedule permits.
Short flying visits do not give you enough time to really get a feel for
what it would be like to spend prolonged vacation periods, or to live
in the area.

Hiring a Lawyer

Unless your estate agent comes to you very highly recommended from a
person whose opinion you trust implicitly, it is advisable to hire an
English speaking lawyer to help you through the buying process.

In order to find a lawyer, you can scan the English versions of local
newspapers and magazines, or ask for recommendations from other expats
already living in the area.

Expat business owners are likely to be able to advise you on a
specialist lawyer for your needs in the area.

Obtaining a Mortgage

Up until 2008 it was extremely easy for a foreigner to acquire a
mortgage from a Spanish bank. However due to the economic crisis which
began to hit Spain hard in the latter part of 2008, Spanish banks have
completely clamped down on lending to locals and foreigners alike.

Therefore if you need a mortgage to purchase your desired property,
you are likely to have more luck applying to a British bank. British
lenders in Spain include:

Santander

Barclays

Banco Halifax Hispania

Leeds and Holbeck Building Society

Newcastle Building Society

Norwich and Peterborough Building Society

You can also find more lenders in the property pages of UK national
newspapers and property magazines.

You now have the basic information you need to proceed with securing
your dream home in the sun. At the time of writing in 2010 prices in
Spain are at an all time low, and there are no clear indications that
things will change in the near future, so it is a good time to buy at a
low price.

However, do shop around and as with any large transaction, before
buying property in Spain, or indeed in any country, consult a lawyer,
trust your instincts and proceed with caution!

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Reply to this Comment

Well it is definitely a buyer's market here in Spain at the time of writing. There are hundreds of thousands (I actually heard on TV there are a million) unsold empty properties on the market, but naturally people from abroad are somewhat hesitant to invest in a country with a very unstable economy, which is unfortunately the situation in Spain at the moment.

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Great article with a lot of valuable information.
And btw. I agree totally with your tip about renting a place before you sign the final contract when buying your own property. Renting first will make you know the area better and most likely you might be able to find a better deal, etc.